Clinton: “End Bermuda Reinsurance Loophole”

By added on 14/01/2016

“High-income money managers have used loopholes related to foreign reinsurance – often located in Bermuda – to avoid paying their fair share,” U.S. Democratic presidential candidate Hillary Clinton said, adding that she would “end the Bermuda reinsurance loophole.”, reports Bernews.

Her official campaign website recently released her plan to “build on the Buffett Rule and end the private tax system for the wealthiest” saying the “tax code is rigged to favor multi-millionaires and billionaires who can exploit loopholes and shelter income in order to avoid paying their fair share.”

As it pertains to Bermuda, her campaign website said, “Shutting down the ‘private tax system’ for the most fortunate, starting by immediately closing egregious loopholes. Hillary will call for strengthening the Buffett Rule by broadening the base of income subject to the rule.

“This means immediately closing egregious loopholes, like the Bermuda reinsurance loophole and the “Romney loophole” that let the most fortunate avoid paying their fair share.”

It also added, “End the Bermuda reinsurance loophole, and tax gaming through complex derivative trading: High-income money managers have used loopholes related to foreign reinsurance – often located in Bermuda – to avoid paying their fair share.

“And they take advantage of complex derivative trades to lower their tax bill. Clinton would build on proposals from both Democrats like President Obama and Republicans in Congress to close down these two loopholes.”

Mrs Clinton also made reference to other islands, telling MSNBC: “We’re now in a position, I think, where we can go after some of these schemes that you did read about, the kind of misclassifying of income, trying to make it look like it’s a capital gain when it’s really ordinary income, going ahead and routing income through the Bahamas or the Cayman Islands or wherever.”

She is the second Democratic candidate to reference Bermuda, with Bernie Sanders — a Senator also running for President —  telling CNN, “What I have said is that I want to rebuild America’s crumbling infrastructure, create up to 13 million jobs rebuilding roads and bridges, and we do that by doing away with the ability of corporations to stash their money in tax havens like the Cayman Islands and Bermuda.”

It is not unusual for Bermuda, and other jurisdictions, to be brought up during elections overseas, with President Barack Obama’s campaign targeting Republican candidate Mitt Romney’s connection to a Bermuda company in the 2012 U.S. Presidential Election, and during last year’s election in the UK, then-Labour leader Ed Miliband made public statements about the British Overseas Territories as it pertains to a beneficial ownership register.

Bermuda Business Development Agency CEO Ross Webber said, “During this election campaign in the US, it would be helpful for the political candidates to understand that Bermuda’s insurance industry comprises the same companies that paid nine percent of 9/11 claims.

“Bermuda based insurers paid $22 billion to rebuild the US Gulf and Florida coasts after devastating storms—and contributed an estimated $35 billion to cover US catastrophe losses over the past dozen years. These companies also support 25 percent of Americans’ medical liability insurance and reinsurance.

“The fact is, Bermuda-domiciled insurers and reinsurers play a critical role in the US and global economy.

“Anyone trying to convince the American public these very real companies, with bricks-and-mortar and thousands of dedicated employees—including nearly 17,000 in the US—are simply tax avoidance vehicles, is neglecting the business, economic and social reality.”